Servicing

Well site services in the U.S. onshore stabilized a bit during the second quarter from early this year, but pricing still remains cutthroat as operators compete for a smaller share of business, the chief of Basic Energy Services Inc. said Friday.

Well servicing contractor Key Energy Services Inc. has agreed to acquire Edge Oilfield Services LLC and Summit Oilfield Services LLC for $300 million in stock and cash, plus reimbursement of up to $40 million of capital spending in the Eagle Ford Shale. Edge primarily rents hydraulic fracturing stack equipment. It also provides well testing services, rental equipment such as pumps and power swivels, and oilfield fishing services. Closing is expected during this quarter subject to customary conditions.

Growing producer demand for well services to support development of North American shale natural gas plays is a main driver behind GE’s planned acquisition of the well support division of John Wood Group plc for $2.8 billion, the company said.

DCP Midstream LLC announced the startup of new facilities servicing the Anadarko-Woodford Shale resource play development in Oklahoma’s Blaine and Canadian counties. The installation of a new high-pressure booster with associated gathering and discharge pipelines is the first phase of DCP Midstream’s development in central Oklahoma. Initially, 15 MMcf/d of capacity will be added. New gas volumes will be delivered to DCP Midstream’s Okarche plant for processing and extraction of natural gas liquids. Producers are positioning themselves in the Anadarko-Woodford Shale and initial production rates are quite promising, the company said.

Admiral Bay Resources Inc. said Friday that the company’s natural gas production has reached 1,228 Mcf/d and continues to increase. The new sales point servicing the Shiloh Project in Neosho and Allen Counties, KS is presently handling over 938 Mcf/d, up from 550 Mcf/d. The Canadian company reported that gas production from the coal bed methane project continues to increase as the newly drilled wells proceed through their expected dewatering process. Seven additional wells are expected to be connected to the sales line over the course of the next three weeks. The balance of the company’s gas production is generated from the Devon, Mound Valley and Quest projects. At the Shiloh project, several coal bed methane and shale gas only wells have seen substantial production increases, since being put online. The Johnson 10-23 well had initial production of 60 Mcf/d. After being produced for only seven days, production has increased to a sustained rate of 110 Mcf/d. Admiral Bay has an additional seven wells that are in the process of being completed and/or being connected to the pipeline. These wells are expected to be in production over the next three weeks. “Admiral Bay now has the critical mass for revenues to contribute strongly to future growth,” said Admiral Bay President Steven Tedesco. “We are comfortable that we are understanding the wells much better, enabling more rapid progress on completions.”